UK Economy
Some 76% of UK mobile subscribers wasting £5bn each year by choosing wrong tariff/ not using free benefits
By Finfacts Team
Apr 12, 2011 - 1:59 AM

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Some 76% of UK mobile subscribers are wasting on average £194.71 a month, amounting to almost £5bn each year by choosing the wrong tariff and not using free benefits, according to study published on Monday. The amount accounts for more than a third of mobile operators’ retail revenues.

The study by price comparison website Billmonitor, says 40% of subscribers choose a calling allowance that was too big, typically using only about a quarter of the calling time that was paid for. Billmonitor estimated this as worth £2.62bn by switching to lower priced  contracts.

Billmonitor, which is supported by the regulator Ofcom, says a further 22% of customers exceeded their allowance of calls, text messages and data usage, wasting £1.53bn, while £740m was estimated as the cost of not using free benefits.

Billmonitor says the total amount of £4.899bn wasted each year for the whole of the UK, is the equivalent of 44% of mobile retail revenue (excl. VAT) left on the table each year by over 25m mobile post-pay customers.

"The reason we can be so sure about these figures is that they're based on real, anonymised customer mobile phone bills. 28,417 mobile bills to be exact. This was not 'survey data' from qualitative research - - but factual customer billing data. The analysis itself was carried out using state-of-the-art statistical analysis implemented by the billmonitor team together with billmonitor's science advisers, Professor Chris Holmes and Dr Nicolai Meinshausen (both from Oxford University)," the report says.

Billmonitor can also reveal just how this 76% of customers breaks down and how much each group is wasting individually:

1. 52% of customers wasting money are on a tariff that’s too large for them, using on average just one quarter of their monthly calling allowance

Total waste: £2.62bn

2. 29% of customers wasting money are on too small a tariff, wasting money on out of allowance calls, texts, data usage as well as other costs that could be reduced with a larger tariff

Total waste: £1.53bn

3. 19% have the right level of inclusive minutes but are wasting money by not optimising free benefits, data & text allowances as well as other costs, or taking advantage of lower costs from 24 month contracts

Total waste: £0.74bn

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